System and Method for Facilitating Management of a Financial Instrument

ABSTRACT

A computer-implemented method for facilitating the management of a financial instrument includes determining an account balance for a financial account. The financial account includes an investment portfolio and a springing guarantee of an income base for a retirement income. The retirement income includes periodic monetary transfers to be commenced at a target retirement date. Each periodic monetary transfer has a respective value based on the income base. The springing guarantee of the income base may be activated on an activation date. The account balance is stored in memory of the data processing system. The stored account balance is periodically updated based at least in part on market performance of the investment portfolio. Using a computing system, the activation date is determined based at least in part on the target retirement date and the income base is determined. A respective value is outputted for each one of the periodic monetary transfers. The respective value of each one of the periodic monetary transfers is based on the value of the stored income base at a time proximate the one of the periodic monetary transfers.

RELATED APPLICATION

This application claims priority to U.S. Provisional Application No.61/308,120 filed Feb. 25, 2010; and this application is acontinuation-in-part of U.S. application Ser. No. 11/531,977, which isrelated to 11/270,860 filed Nov. 9, 2005, which claims priority to U.S.Provisional Application Ser. No. 60/703,630 filed Jul. 29, 2005.

TECHNICAL FIELD

This invention relates generally to computer management, and moreparticularly to a system, method, and software for facilitatingmanagement of a financial instrument.

BACKGROUND

Many retirement funds are characterized by an anticipated retirementtarget date for the participant. Target-date funds are oftencharacterized by four features: each fund is “targeted” to meet theneeds of individuals planning to retire in a specific year; investmentsare diversified across a mix of asset classes, usually equities andfixed income; the fund automatically rebalances periodically to maintainits target asset allocation; and the asset allocation of the fundevolves along a “glide path” as the target retirement date approaches,generally becoming more conservative through an increased weighting offixed income securities. The glide path varies significantly acrosstarget-date funds. Target-date funds may expose participants to avariety of risks that could disrupt enjoyment of a secure retirement.For example, many participants have experienced significant loss offuture retirement income because of sharp declines in asset values inthe years immediately preceding retirement. Another risk is that thebalance of a retirement account may become zero or nominal due to astring of poor market returns or because of outliving one's assets. Apurchasing power risk may arise if retirement income does not growrapidly enough to keep pace with inflation during retirement.

SUMMARY OF THE INVENTION

A computer-implemented method for facilitating the management of afinancial instrument includes determining an account balance for afinancial account. The financial account includes an investmentportfolio and a springing guarantee of an income base for a retirementincome. The retirement income includes periodic monetary transfers to becommenced at a target retirement date. Each periodic monetary transferhas a respective value based on the income base. The springing guaranteeof the income base may be activated on an activation date. The accountbalance is stored in memory of the data processing system. The storedaccount balance is periodically updated based at least in part on marketperformance of the investment portfolio. Using a computing system, theactivation date is determined based at least in part on the targetretirement date and the income base is determined. A respective value isoutputted for each one of the periodic monetary transfers. Therespective value of each one of the periodic monetary transfers is basedon the value of the stored income base at a time proximate the one ofthe periodic monetary transfers.

Particular embodiments of the present invention may provide one or moretechnical advantages. For example, particular systems andcomputer-implemented methods disclosed herein may facilitate themanagement of various guarantees of a financial instrument. Particularembodiments may be capable of managing guaranteed step-up provisionsand/or downside income base protection for individuals approachingand/or living in retirement. Various systems may include features thatmitigate risk exposure for individuals approaching retirement and/orthat mitigate other potential hindrances to achieving various retirementgoals. Certain embodiments may provide all, some, or none of theseadvantages. Certain embodiments may provide one or more otheradvantages, one or more of which may be apparent to those skilled in theart from the figures, descriptions, and claims included herein.

BRIEF DESCRIPTION OF THE DRAWINGS

For a more complete understanding of the present invention andadvantages thereof, reference is now made to the following descriptiontaken in conjunction with the accompanying drawings, in which:

FIG. 1 illustrates a finical instrument managed by a data processingsystem according to a particular embodiment;

FIG. 2 illustrates a financial instrument according to a particularembodiment;

FIGS. 3A and 3B provide a flowchart illustrating the management of afinancial instrument by a data processing system according to aparticular embodiment;

FIG. 4 illustrates an example financial transfer implemented by a dataprocessing system according to a particular embodiment;

FIGS. 5A and 5B illustrate an example data processing system formanaging a financial instrument according to a particular embodiment;

FIGS. 6A and 6B are charts illustrating the activation of a lifetimepayment guarantee that is managed at least in part by the example dataprocessing system of FIGS. 5A and 5B according to one embodiment;

FIG. 7 is a flowchart illustrating example steps that may be implementedat least in part by a data processing system to facilitate themanagement of a particular lifetime payment guarantee according to oneembodiment; and

FIG. 8 illustrates an embodiment of a client that may be used to accessthe data processing system of FIGS. 5A and 5B according to oneembodiment.

DESCRIPTION OF EXAMPLE EMBODIMENTS

It should be understood at the outset that although exampleimplementations of embodiments of the invention are illustrated below,the present invention may be implemented using any number of techniques,whether currently known or not. The present invention should in no waybe limited to the example implementations, drawings, and techniquesillustrated below. Additionally, the drawings are not necessarily drawnto scale.

FIG. 1 illustrates a system 10 for providing financial instrument 100according to a particular embodiment of the present invention. System 10may interact with customer 110 and issuer 120; and system 10 may utilizeaccount 130 and protected value 140. Financial instrument 100 mayrepresent a contract between customer 110 and issuer 120. Financialinstrument 100 may include certain provisions as described below inrelation to FIG. 2.

According to certain embodiments, system 10 may be utilized to providefinancial instrument 100 to customer 110, such that customer 110 maymake a deposit and retain liquidity, while also receiving the benefit ofa guarantee of lifetime payments and/or the security associated with aguaranteed growth rate. According to certain embodiments, system 10 maybe utilized to provide financial instrument 100 to customer 110, suchthat one or more features associated with financial instrument 100 maybe portable.

Customer 110 may broadly refer to one or more of an account holder 112,a beneficiary 114, a designated party 116, and/or one who purchasesfinancial instrument 100 for another person or entity. In certainembodiments, account holder 112 may represent a party who purchasesfinancial instrument 100 and/or who is attributed as being an owner ofaccount 130. In certain embodiments, account holder 112 may have one ormore ownership rights in account 130. For example, account holder 112may have the right to terminate financial instrument 100, to makeinvestment decisions for account 130, to identify one or morebeneficiaries 114, to identify one or more designated parties 116,and/or to make deposits into account 130. In a particular embodiment,account holder 112 may be the entity or entities who have tax liabilityfor the transactions related to account 130.

In certain embodiments, beneficiary 114 may represent a party who mayreceive payments and/or make withdrawals in accordance with the terms offinancial instrument 100. In certain embodiments, designated party 116may represent an individual, group of individuals, and/or other entitythat may be designated for purposes of determining death benefits,lifetime payments, fees, guaranteed rates, and/or other features offinancial instrument 100. For example, guaranteed rates and/or fees maybe determined based upon the age, gender, and/or health of designatedparty 116. As another example, death benefit provisions may be basedupon the death of designated party 116.

In certain embodiments, one or more of account holder 112, beneficiary114, and designated party 116 may be the same party. In certainembodiments, financial instrument 100 may be purchased by account holder112 for the benefit of beneficiary 114, with designated party 116 beingthe designated life for the guarantee of lifetime payments.

In certain embodiments, one or more of account holder 112, beneficiary114, and designated party 116 may be related. For example, designatedparty 116 and beneficiary 114 may be related as husband and wife. Asanother example, account holder 112 may be an employer and an employeemay be both beneficiary 114 and designated party 116. Alternatively,account holder 112 and beneficiary 114 may be the same individual orentity. In some embodiments, an employer might purchase account 130 foraccount holder 112. Also, financial instrument 100 may have multipleaccount holders 112, beneficiaries 114, and/or designated parties 116.For example, a husband and a wife may both be beneficiaries 114 anddesignated parties 116. As another example, two or more businesspartners could be designated parties 116. While this patent describesvarious actions, benefits, steps, etc. in relation to a customer 110,account holder 112, beneficiary 114, and/or designated party 116, thosedescriptions should not be construed as limiting because financialinstrument 100 might provide for various persons to exercise control,take various actions, receive certain benefits, and/or affect certainfeatures with regard to financial instrument 100.

Issuer 120 may represent an entity that provides and/or sells financialinstrument 100 to customer 110. Issuer 120 may represent a bank, aninsurance company, mutual fund company, or other business entity engagedin the sale of one or more financial instruments. Issuer 120 may alsorepresent multiple entities that operate together to provide or sellfinancial instrument 100.

Account 130 may represent a principal balance including amountsdeposited by customer 110 (and/or transferred from a separate account)together with accrued growth due to a return on one or more investments.The value of account 130 may be distributed among one or moreinvestments 132. Investment 132 may provide a fixed or variable return,and the value of account 130 may be distributed among any combination ofinvestments 132, such as municipal bonds, bond funds, money marketaccounts, corporate securities, index funds, mutual funds, target datefunds, real estate investment trusts, or any other appropriate type ofinvestments. In certain embodiments, account 130 may include one or moreinvestments 132 associated with multiple financial entities. In certainembodiments, the value of account 130 may be withdrawn in whole or inpart at the discretion of customer 110. In various embodiments, issuer120 may restrict the investments 132 available to customer 110 or allowcustomer 110 to accept certain limitations in exchange for otherbenefits. Account 130 may or may not be associated with issuer 120. Insome embodiments, a third party administering account 130 may contractwith issuer 120 to provide the guarantees. An insurance company, forexample, might provide the guarantees for mutual fund accountsadministered by a third party or for other types of financial accounts.

In certain embodiments, where appropriate regulatory requirements aremet, account 130 may represent a tax-deferred account. In embodimentswhere account 130 represents a tax-deferred account, customer 110 maymake one or more deposits into account 130 using pre-tax funds and/oraccount 130 may be permitted to grow tax-free for a period of time. Asused herein, the term “tax” may refer to one or more taxes levied by afederal, state, and/or any other appropriate taxing authority.

Protected value 140 represents a value all or a portion of which issuer120 guarantees that beneficiary 114 will be able to receive. Protectedvalue 140 may be based upon the value of account 130 at some point intime. In some embodiments, although account 130 may decrease due tomarket fluctuations, protected value 140 does not, thus providing aguaranteed rate of return regardless of market performance. In certainembodiments, protected value 140 may be based upon a deposit and thedeposit may include an account balance from an existing contract. Thus,in some embodiments, the guarantees described herein may be added toexisting financial instruments after the passage of time. In certainembodiments, protected value 140 may be based upon a substantiallysimilar value from a separate financial instrument.

In certain embodiments, the amount and/or the guaranteed percentage ofprotected value 140 may vary based on certain characteristics ofcustomer 110. For example, the guaranteed percentage of protected value140 (or protected value 140 itself) may vary based upon the gender, age,and/or health status of one or more of account holder 112, beneficiary114, and designated party 116. In certain embodiments, the amount and/orthe guaranteed percentage of protected value 140 may vary depending uponwhether and to what extent customer 110 accepts certain limitations onflexibility and/or control over account 130 and/or distributionstherefrom. In certain embodiments, the amount and/or the guaranteedpercentage of protected value 140 may vary depending on the timing ofone or more events.

In certain embodiments, protected value 140 may be calculated at thetime that financial instrument 100 is purchased, and in otherembodiments protected value 140 may be calculated at the end of acertain period of time, upon the happening of a triggering event, or ona periodic basis. In some embodiments, protected value 140 may be basedupon a combination of factors and calculated at different times.Depending upon the embodiment, protected value 140 may become fixed atsome point in time. For example, protected value 140 may become fixed atthe time of the first discretionary withdrawal from account 130 bycustomer 110. In certain embodiments, protected value 140 may becomefixed at the time that one or more deposits are made into account 130.In certain embodiments, protected value 140 may become fixed upon anelection by customer 110.

Numerous methods may be used to fix protected value 140 at some point intime. For example, protected value 140 may be calculated as equal to thevalue of account 130 at the time of the first withdrawal by customer110. Alternatively, protected value 140 may be calculated as the highestvalue of account 130 at one or more specified times or at any time. Forexample, protected value 140 may be calculated as the highest value ofaccount 130 on each of the first ten anniversary dates, where theanniversary date may be an anniversary of the purchase date of financialinstrument 100, a birthday of customer 110, a wedding date for customer110, or a date specified by customer 110. In embodiments where acalculation is based on an anniversary date, when the anniversary datefalls on a weekend, holiday, or other non-business day, the calculationmay be based on the immediately preceding business day (or,alternatively, on the next business day).

In embodiments in which the calculation of protected value 140 (or anyother feature of financial instrument 100) is based on a birthday ofcustomer 110, a wedding date for customer 110, or a date specified bycustomer 110, financial instrument 100 may advantageously provideenhanced customization by customer 110 and may reduce the number ofcritical dates that customer 110 may need to consider. In addition,through the use of one of these dates, issuer 120 may diversify the riskand reduce any seasonal overhead cost associated with issuing numerousfinancial instruments 100, all having identical issuing dates (as mayoccur if a critical date is associated with a calendar year, a fiscalyear, or the initiation of a group plan for a large number of employeeson the same date).

In certain embodiments, protected value may be calculated as the greaterof multiple calculation methods. For example, protected value 140 may becalculated as the value of account 130 on the date of first withdrawalor the highest value of account 130 on the first ten anniversary dates,but in no event less than the initial value of account 130 growing at afive percent growth rate for the first ten years. As another example,protected value 140 may be calculated as the value of account 130 on thedate of first withdrawal, or the highest value of account 130 on eachanniversary of the birthday of account holder 112 between the date thatfinancial instrument 100 was purchased and the date of the firstwithdrawal, but in no event less than the initial value of account 130growing at a five percent growth rate until earliest of the business dayprior to the first withdrawal or the date that account holder 112 turnsseventy. In certain embodiments, the growth rate utilized in theseexamples may alternatively be three percent, four percent, six-percent,or based on an index.

In certain embodiments, protected value 140 may be calculated based uponthe value of account 130 prior to the inclusion of any bonuses.Alternatively, in certain embodiments, protected value 140 may becalculated based upon the value of account value 130 with additionalbonuses (or other incentives) added. For example, issuer 120 may pay abonus to entice customers to purchase the guarantees discussed herein.The invention may include any method of determining protected value 140.

In certain embodiments, the amount and/or the guaranteed percentage ofprotected value 140 may change after it has been initially determined.As one example, the amount and/or guaranteed percentage of protectedvalue 140 may change based upon changes in the law. As another example,the amount and/or guaranteed percentage of protected value 140 maychange based upon an inflationary index, interest rate, or exchangerate. As yet another example, the amount and/or guaranteed percentage ofprotected value 140 may change based upon changes in the health or ageof customer 110.

In certain embodiments, customer 110 may be allowed to step-up protectedvalue 140 at specified times or at any time. For example, following anelection to step-up protected value 140, protected value 140 may be setas equal to the current value of account 130. In a particularembodiment, customer 110 may elect to step-up protected value 140 at anytime after the fifth anniversary of the first withdrawal, withadditional step-ups being available five years after the date of theprevious step-up election. A step-up in protected value 140 may requirefurther deposits to account 130.

In certain embodiments, protected value 140 may be automaticallystepped-up on a periodic basis or upon the happening of particularevents. For example, an automatic step-up of protected value 140 mayoccur on a monthly, quarterly, or yearly basis. In a particularembodiment, a step-up to protected value 140 may automatically occur onan annual basis after the first withdrawal, with protected value 140being set as equal to the greatest of the value of financial account 130on the previous quarterly anniversaries if that amount is greater thanthe current protected value 140. In alternative embodiments, monthly,bi-monthly, semi-annual, or any other appropriate anniversary may beused and automatic step-ups may occur on a semi-annual, quarterly,monthly, or any other appropriate basis.

In certain embodiments, customer 110 may be allowed to step-up protectedvalue 140 or protected value 140 may be automatically stepped-up on anannual basis associated with an anniversary date. In certainembodiments, the anniversary date may be an anniversary of the purchasedate of financial instrument 100, a birthday of customer 110, a weddingdate for customer 110, or a date specified by customer 110. In theseembodiments, when the anniversary falls on a weekend, holiday, or othernon-business day, protected value 140 may be stepped-up on theimmediately preceding business day (or, alternatively, on the nextbusiness day).

In certain embodiments, rather than setting protected value 140 as equalto the value of account 130 on a certain anniversary, protected valuemay be set as a percentage of such a value, as a certain valueappreciated at a specified growth rate, or as any other appropriatevalue. In certain embodiments, the step-up value for protected value 140may take into consideration any additional purchase payments andadjustments to these purchase payments.

In certain embodiments, certain provisions of financial instrument 100may be managed through the use of annual income amount 142. For example,a guarantee of lifetime payments may be managed by calculating annualincome amount 142 and evaluating discretionary withdrawals in relationto annual income amount 142. For example if the cumulative withdrawalsfor a certain year exceed annual income amount 142, then annual incomeamount 142 may be reduced accordingly for future years. Furtherexplanation of the operation of certain embodiments with respect toprotected value 140 and annual income amount 142 are included below inrelation to FIGS. 3A and 3B. The operation of an alternative embodimentis explained further below in relation to FIGS. 6A through 7. Asexplained further below in relation to FIGS. 6A through 7, an incomebase may be used in various embodiments to calculate protected value 140and/or annual income amount 142.

In the operation of certain embodiments, customer 110 may purchasefinancial instrument 100 from issuer 120 (or an agent thereof). In somecases, the purchase may occur electronically. Issuer 120 may then createaccount 130 and associate one or more deposits made by customer 110 withaccount 130. In certain embodiments, customer 110 may make investmentchoices regarding the allocation of funds associated with account 130.Protected value 140 may be calculated using one or more specifiedcalculation methods.

In some embodiments, following the purchase of financial instrument 100,customer 110 may make additional deposits to and/or discretionarywithdrawals from account 130. Withdrawals from account 130 may or maynot be required or allowed based upon the terms of financial instrument100. The timing of withdrawals may or may not be regulated by financialinstrument 100. In certain embodiments, withdrawals can be taken asseparate partial withdrawals or as systematic withdrawals. For example,withdrawals may be automated and may be set up on a periodic basis, withthe period being yearly, quarterly, monthly, etc.

Although financial instrument 100 has been described as being purchaseddirectly from issuer 120 in certain embodiments, financial instrument100 may be purchased through one or more intermediaries.

FIG. 2 illustrates a particular embodiment of financial instrument 100.In the embodiment shown, financial instrument 100 includes investmentcontract 102. Investment contract 102 may represent a contract for abroad range of investment products. For example, investment contract mayrepresent an individual or group annuity, mutual fund contract,individual retirement account contract, and/or an employee retirementplan contract, such as a 401(a) contract, a 401(k) contract, a 403(b)contract, and/or a 457 contract. In a particular embodiment, investmentcontract 102 may represent a discretionary group variable annuitycontract.

In addition to the basic terms of investment contract 102, financialinstrument 100 may include additional provisions including lifetimepayment guarantee 104, growth rate guarantee 106, portability guarantee107, continuation guarantee 108, and death benefit 109. Althoughinvestment contract 102, lifetime payment guarantee 104, growth rateguarantee 106, portability guarantee 107, continuation guarantee 108,and death benefit 109 are shown as separate elements, one or more ofthese elements may be combined, and each of these elements may alsoinclude numerous components.

In certain embodiments, different elements of financial instrument 100may be purchased or elected at different times. For example, investmentcontract 102 may be purchased in year one, and lifetime paymentguarantee 104 and growth rate guarantee 106 may be purchased or electedin year one or at anytime thereafter. In certain embodiments, the scopeor provisions of one or more of lifetime payment guarantee 104, growthrate guarantee 106, portability guarantee 107, continuation guarantee108, and death benefit 109 may be modified after the purchase ofinvestment contract 102. For example, investment contract 102 may bepurchased with lifetime payment guarantee 104, such that issuer 120guarantees that beneficiary 114 will receive payments for the life ofdesignated party 116, with designated party 116 and beneficiary 114being the same individual. Then, according to this example, at a laterdate, an election may be made to expand the scope of lifetime paymentguarantee 104, such that issuer 120 guarantees that beneficiary 114 willreceive payments for the life of designated party 114, with designatedparty 116 and beneficiary 114 being both the individual and the spouseof the individual.

In certain embodiments, lifetime payment guarantee 104 may includeprovisions guaranteeing that beneficiary 114 may receive financialtransfers for life, beginning at or after a specified triggering event.For example, in certain embodiments, these financial transfers may bedue to discretionary withdrawals and/or payments. In certainembodiments, the amount of (and/or a limit for) these financialtransfers may be fixed or variable. For example, the amount of (and/or alimit for) these financial transfers may be determined based upon theage, gender, health status, and/or other morbidity factors for one ormore individuals. As another example, the amount of (and/or a limit for)these financial transfers may be independent of such factors. In certainembodiments, the amount of (and/or the limit for) these financialtransfers may change after a period of time according to a set schedule,changes in an external index, and/or any appropriate factor.

In certain embodiments, the amount of (and/or a limit for) thesefinancial transfers may be determined based upon specified percentagesof protected value 140. For example, the amount of (and/or a limit for)these financial transfers may be set at a first percentage for a certainperiod and then change to second percentage for another period. Incertain embodiments, these percentages may be fixed upon the effectivedate of lifetime payment guarantee 104, upon the date of a firstfinancial transfer, or upon any other appropriate date. In certainembodiments, the amount of (and/or a limit for) these financialtransfers may vary based on the age of customer 110 on the date of afirst financial transfer.

For example, in a particular embodiment, the amount of (and/or a limitfor) these financial transfers may be a first percentage of protectedvalue 140 per year when the date of the first financial transfer isprior to the date customer 110 turns a threshold age and may be a secondpercentage of protected value 140 per year when the date of the firstfinancial transfer is on or after the date that customer 110 turns thethreshold age. In a particular embodiment, the threshold age may besixty-five, the first percentage may be four percent, and the secondpercentage may be five percent, although any percentage and anythreshold may be used. In an alternative embodiment, multiple thresholdages may be establish to distinguish between three or more amounts of(and/or limits for) these financial transfers.

In certain embodiments, lifetime payment guarantee 104 may guaranteethat beneficiary 114 will receive no less than annual income amount 142each year for the life of designated party 116, beginning with an event.In certain embodiments, annual income amount 142 may be four percent,five percent, or six percent of protected value 140, but any percentageof any measured amount could be used. In certain embodiments, eachmeasuring year for annual income amount 142 may be determined based onan anniversary date, where the anniversary date may be an anniversary ofthe purchase date of financial instrument 100, a birthday of customer110, a wedding date for customer 110, or a date specified by customer110. In certain embodiments, protected value 140 may be adjusted upwardsor downwards based on certain events. For example, protected value 140may be increased by additional deposits and may be decreased bycumulative withdrawals in a single year that exceed annual income amount142.

In certain embodiments, growth rate guarantee 106 may include provisionsallowing customer 110 to make withdrawals from account 130 based upondeposits made by customer 110. The provisions may further provide thatthe withdrawals may be made from a value that is guaranteed to grow at aspecified fixed or variable rate for a specified period of time. Forexample, growth rate guarantee 106 may allow beneficiary 114 to makewithdrawals from protected value 140, with protected value 140guaranteed to be no less than the value of customer deposits growing ata fixed five percent per year for ten years from the date of the firstdeposit or until the date of the first withdrawal, whichever is sooner.

In certain embodiments, the specified rate for growth rate guarantee 106may be any positive fixed value. In certain embodiments, the specifiedrate for growth rate guarantee 106 may be zero or a fixed negativevalue. In embodiments where the specified rate is zero or a fixednegative value, the beneficial aspects of growth rate guarantee 106 mayinclude a reduction in risk for customer 110. In certain embodiments,the specified rate may be based on one or more variable indices. Forexample, the specified rate may be based on the Consumer Price Index, astock market index, and/or the Federal Reserve's discount rate.

In certain embodiments, the specified rate may vary depending on thetiming of deposits, the size of deposits, and/or the value ofinvestments 132. For example, different rates may apply to differentdeposits or the overall rate may be calculated based on the rates ineffect at the time that deposits are made, weighted based on therelative size (or actual size) of the deposits. In certain embodiments,the specified rate may vary based on characteristics of account holder112, beneficiary 114, and/or designated party 116. For example, thespecified rate may vary depending on the gender, age, or health statusof designated party 116.

In certain embodiments, the guaranteed growth may be set at a first ratefor a specified period of time, or until a specified event occurs, andthen change to a second rate. For example, the guaranteed growth ratemay be zero for the first two years and then may change to a fixed fivepercent growth rate for the next eight years. In certain embodiments,the growth rate may change numerous times, with the changes occurringbased upon specified periods of time and/or upon the occurrence ofspecified events.

In certain embodiments, portability guarantee 107 may include provisionsallowing customer 110 to transfer all or a portion of account 130 to aseparate financial instrument together with one or more features offinancial instrument 100. For example, in certain embodiments,portability guarantee 107 may include provisions guaranteeing thatissuer 120 will make available to customer 110 a financial instrumentsubstantially similar to financial instrument 100 such that if customer110 transfers all or a portion of account 130 to the separate financialinstrument, then all or a portion of protected value 140 or annualincome amount 142 may be retained by customer 110 under the separatefinancial instrument. Additional details for certain embodiments ofportability guarantee 107 are provided below in relation to FIG. 4.

In certain embodiments, continuation guarantee 108 may includeprovisions allowing one or more features of a separate financialinstrument to be transferred to financial instrument 100 together with afinancial transfer from the separate financial instrument into account130. For example, in a particular embodiment, one or more of protectedvalue 140 and annual income amount 142 may be set as equal to all or aportion of a substantially similar value associated with the separatefinancial instrument. Additional details for certain embodiments ofcontinuation guarantee 108 are provided below in relation to FIG. 4.

In embodiments of financial instrument 100 including death benefit 109,death benefit 109 may include provisions allowing for payments to bemade to a recipient designated by account holder 112 and/or beneficiary114, upon the death of designated party 116. For example, payments madeunder death benefit 109 may be made to beneficiary 114 upon the death ofdesignated party 116, where designated party 116 is account holder 112.As another example, payments made under death benefit 109 may be made toan identified third party beneficiary upon the death of designated party116 or beneficiary 114. Death benefit 109 may provide for payment of anamount based upon the value of account 130, protected value 140, or someother value identified in death benefit 109. For example, death benefit109 may provide for payment in the amount of the value of account 130 atthe time of death. As another example, death benefit 109 may provide forpayment in the amount of the highest value of account 130 on anyanniversary of the effective date of financial instrument 100. Incertain embodiments, death benefit 109 may provide for payment in theamount of the highest of multiple calculation methods. Although deathbenefit 109 has been illustrated and described as a separate element offinancial instrument 100, death benefit 109 may be formed from multiplecomponents and/or may be included as part of another element offinancial instrument 100.

In certain embodiments, financial instrument 100 may provide for anoption allowing customer 110 to elect to receive the present value offuture guaranteed payments. For example, in embodiments where the chargefor lifetime payment guarantee 104 is an up-front charge, financialinstrument 100 may allow for customer 110 to cancel lifetime paymentguarantee 104 and receive a payment (or credit to account 130)calculated based upon the present value of the guarantee. In theseembodiments, the calculation may or may not include an underwritingassessment of the life expectancy of customer 110.

As indicated above, in certain embodiments, financial instrument 100 mayprovide for multiple beneficiaries 114 and financial instrument 100 mayprovide for various persons to exercise control. For example, financialinstrument 100 may provide that both a husband and a wife arebeneficiaries 114 and designated parties 116. Financial instrument 100may further provide that the husband may make discretionary withdrawalsfrom account 130 and, if the husband pre-deceases the wife, that thewife may make discretionary withdrawals from account 130 after thehusband's death. Additionally, financial instrument 100 may furtherprovide that if account value 130 reaches zero during the husband'slife, then the husband may receive periodic payments for life and then,upon his death, the wife may receive periodic payments for her life. Incertain embodiments, financial instrument 100 may include similarprovisions for business partners or other arrangements involvingmultiple beneficiaries 114 and/or designated parties 116.

The costs associated with each element of financial instrument 100 maybe assessed together or as separate charges, and the charges may beassessed in different ways. For example, the costs may be assessed asup-front charges, as asset charges, or as charges against withdrawals orpayments. In certain embodiments, the costs may be charged periodicallyand/or may vary over time. For example, there may be no charge for aperiod of time and/or the charge may increase or decrease over timedepending on a variety of factors. In certain embodiments, the costs maybe charged in a manner such that the charge is assessed pro-rata overmultiple investments or accounts 130, according to an election bycustomer 110, and/or such that the tax consequences of the charge aresubstantially minimized. In a particular embodiment, the charge for eachelement is assessed as a daily asset charge against the value of account130. For example, the charge assessed for lifetime payment guarantee 104and growth rate guarantee 106 may be an eighty-five basis point charge(0.85 percent per year) assessed against the daily balance of account130. In embodiments in which both a husband and a wife are beneficiaries114 and designated parties 116, the charge assessed for lifetime paymentguarantee 104 and growth rate guarantee 106 may be a 135 basis pointcharge (1.35 percent per year) assessed against the daily balance ofaccount 130. In certain embodiments, financial instrument 100 may allowcustomer 100 to purchase financial instrument 100 and then defer thedecision as to whether to include both husband and wife as beneficiaries114 and/or designated parties 116 until a later date. In a particularembodiment, financial instrument 100 may allow customer 110 to waituntil the time of a first withdrawal from account 130 to decide whetherto include both a husband and a wife as beneficiaries 114 and designatedparties 116. In these particular embodiments, the charge assessed forlifetime payment guarantee 104 and growth rate guarantee 106 may be aneighty-five basis point charge (0.85 percent per year) assessed againstthe daily balance of account 130 during the accrual phase and a 135basis point charge (1.35 percent per year) assessed against the dailybalance of account 130 during the distribution phase. As yet anotherexample, the charge assessed for death benefit 109 may be a 140 basispoint charge (1.40 percent per year) assessed against the daily balanceof account 130.

In certain embodiments, one or more features of financial instrument 100may be dependent upon an age of customer 110. For example, in certainembodiments, customer 110 may not be eligible to purchase and/or utilizecertain features of financial instrument 100 before customer 100 attainsa specified age. In a particular embodiment, customer 110 may not beeligible for one or more guarantees prior to attaining the age of fifty.In particular embodiments, where customer 110 represents multipleindividuals, the age utilized to determine eligibility may be the age ofthe youngest individual. For example, if designated party 116 includesboth a husband and a wife, then one or more guarantees may not beavailable until both the husband and the wife attain the age of fifty.

FIGS. 3A and 3B provide flowchart 200 which illustrates the operation offinancial instrument 100 according to a particular embodiment. Flowchart200 traces a few of the possible scenarios that are available tocustomer 110 following the purchase of an embodiment of financialinstrument 100. Flowchart 200 is intended to demonstrate an embodimentof financial instrument 100 in which certain features of financialinstrument 100 are paid for on a daily basis through the use of a dailyfee assessment, assessed on a daily basis against the value of account130. Accordingly, although in certain embodiments more than one of theelected actions identified in flowchart 200 may be taken on the sameday, flowchart 200 assumes that only one elected action will be takenfor any given day.

According to flowchart 200, at step 201, customer 110 may make one ormore initial deposits and purchase financial instrument 100, includinglifetime payment guarantee 104 and growth rate guarantee 106. At step202, account 130 is created. Customer 110 may designate investmentallocations for account 130, one or more beneficiaries 114, and/or oneor more designated parties 116, at step 203. If additional deposits aremade by customer 110, at step 204, then the value of account 130 isincreased by the amount of the additional deposits, at step 212. In somecases, a fee may be deducted from the additional deposits. If an electedwithdrawal is taken at step 206, then the value of account 130 isdecreased by the amount of the withdrawal and the cumulative yearlywithdrawal is calculated at step 208. If the withdrawal is the firstwithdrawal taken in relation to financial instrument 100, at step 210,then protected value 140 and annual income amount are calculated at step220. Similarly, if additional deposits are made by customer 110 at step204 and the first withdrawal has already been taken at step 214, thenprotected value 140 and annual income amount 142 are calculated at step220. In some embodiments, the additional deposits may not change some orall of these values. If the withdrawal is not the first withdrawal takenin relation to financial instrument 100, at step 210, then protectedvalue 140 is decreased by the amount of the withdrawal at step 216. Ifthe cumulative yearly withdrawal exceeds annual income amount 142, atstep 218, then protected value 140 and annual income amount 142 arerecalculated at step 222. These and other calculations are discussed inmore detail below.

If the value of account 130 is equal to zero, at step 230, then theremay be multiple possible alternative outcomes. If the value of account130 is equal to zero at step 230 and cumulative yearly withdrawals areless than or equal to annual income amount 142 at step 231, thenlifetime benefit payments may be made to customer 110 in an amountequivalent to annual income amount 142, at step 232. If the value ofaccount 130 is equal to zero at step 230 and cumulative yearlywithdrawals are greater than annual income amount 142, then financialinstrument 100 may be terminated in accordance with the provisions offinancial instrument 100, at step 236.

If financial instrument 100 includes death benefit 109 and if customer110 dies, at step 240, then payments are made pursuant to the provisionsof death benefit 109, at step 242. If customer 110 elects to terminateone or more provisions of financial instrument 100, at step 250, thenthose provisions are terminated in accordance with the terms offinancial instrument 100, at step 252.

If a step-up for protected value 140 is available at step 260 and ifcustomer 110 elects a step-up for protected value 140 at step 262, thenprotected value 140 is set as equal to the current value of account 130and annual income amount 142 and annual withdrawal amount 144 areupdated, at step 264. In some embodiments, step 262 may be omitted andthe step-up may be automatic. Account 130 may be updated to reflectdaily changes in investments 132 and daily fees may be assessed againstaccount 130, at step 270.

The calculations identified in flowchart 200 are dependent upon theparticular features of financial instrument 100. Included below areexample calculations for particular embodiments of financial instrument100. In the example calculations described below, financial instrument100 is treated as including investment contract 102, lifetime paymentguarantee 104, and growth rate guarantee 106. For the purpose of thesecalculations growth rate guarantee 106 is treated as a guarantee of afive percent growth rate for the first ten years, and lifetime paymentguarantee 104 is treated as a guarantee of five percent payments forlife. Unless otherwise indicated, it will be assumed that financialinstrument 100 was purchased with an initial deposit and no additionaldeposits have been made. Also, unless indicated otherwise, all interestis assumed to be compounded daily.

Each time that a withdrawal is made, the value of account 130 may bereduced by the amount of the withdrawal. In one embodiment, on the dateof the first withdrawal, protected value 140 may be set at the greaterof the current value of account 130 or the initial value of account 130growing at five percent per year compounded. Using these assumptions, onthe date of the first withdrawal, annual income amount 142 may be set atfive percent of protected value 140 at the time that protected value 140is initially determined. In particular embodiments, the percentageand/or method of determining annual income amount 142 may vary.

For example, suppose an initial deposit of $100,000 is made on Apr. 1,2005. The first withdrawal takes place on Feb. 1, 2006 when the value ofaccount 130 is equal to $102,500. Protected value 140 would initially becalculated as the greater of $102,500 or $104,175.16.

$100,000×(1.05)^((306/365))=$104,175

Thus, protected value 140 would be $104,175. After the initial protectedvalue 140 is calculated, the withdrawal amount may be subtracted fromaccount 130 and protected value 140. Accordingly, based on theassumptions above, annual income amount 142 would initially be$5,208.75.

$104,175×0.05=$5,208.75

If the cumulative withdrawals in a given year exceed annual incomeamount 142, protected value 140 and annual income amount 142 arerecalculated. Suppose that the current value of account 130 is $55,000and annual income amount 142 is $5,000. The first withdrawal during theapplicable year is $7,000, which is $2,000 greater than annual incomeamount 142. The first step in the calculation would be to subtractannual income amount 142 from the current value of account 130. Thus,the value of account 130 would be reduced to $50,000.($55,000-$5,000=$50,000) The next step is to calculate the new annualincome amount 142. Annual income amount 142 would decrease according tothe percentage of the excess amount to the value of account 130 prior tothe excess being deducted. Thus, annual income amount 142 would drop to$4,800 for subsequent years.

(1−($2,000/$50,000))×$5,000=$4,800

The excess withdrawal amount would then be subtracted from the value ofaccount 130. Thus, after the withdrawal, the value of account 130 wouldbe $48,000. Protected value 140 would similarly be reduced by the amountof the $7,000 withdrawal.

In certain embodiments, withdrawals that reduce the value of account 130below a specified minimum amount will not be allowed if they are greaterthan the annual income amount. In certain embodiments, provisions infinancial instrument 100 may allow for exceptions to accommodate certainprovisions of the tax code. For example, if financial instrument 100 issubject to required minimum distributions under the tax code, thenfinancial instrument 100 may provide that required withdrawals will notreduce annual income amount 142.

Each time that an additional deposit is made, the value of account 130may be increased by the amount of the deposit. If a withdrawal has beenmade prior to the additional deposit, then protected value 140 may alsobe increased by the amount of the additional deposit and annual incomeamount 142 may be increased by five percent of the additional deposit.For example, suppose protected value 140 is $50,000 and annual incomeamount is $5,000. If customer 110 makes an additional deposit of$42,400, then protected value 140 would increase to $92,400.

$50,000+$42,400=$92,400

Annual income amount 142 would increase to $7,120.

($42,400×0.05)+$5,000=$7,120

Again, the percentages may vary and the ability to make deposits may becontrolled.

If financial instrument 100 provides for step-ups to protected value140, during periods when step-ups are allowed customer 110 may elect tostep-up protected value 140 to equal the value of account 130 (or someproportional amount). In some cases, the step-up may be automatic. Ifsuch a step-up is elected, annual income amount 142 may be set at thegreater of its current value or five percent of the new protected value140. For example, suppose the value of account 130 is $80,000, protectedvalue 140 is $60,000 and annual income amount 142 is $3,500. If astep-up is elected, protected value 140 would be set at $80,000, andannual income amount 142 would be set at $4,000. ($80,000×0.05=$4,000).

FIG. 4 illustrates an example financial transfer 300 according to aparticular embodiment. In the embodiment shown in FIG. 4, financialtransfer 300 is directed from financial instrument 100 a to financialinstrument 100 b. In the embodiment shown, both financial instrument 100a and financial instrument 100 b are owned by customer 110, although inalternative embodiments, financial instrument 100 b may have a differentbeneficiary 114 and/or designated party 116 than financial instrument100 a. In certain embodiments, financial instrument 100 a may have adifferent account holder 112 than account 100 b. For example, accountholder 112 for financial instrument 100 a may be both an employer and anemployee and account holder 112 for financial instrument 100 b may beonly the employee. In certain embodiments, financial instruments 100 aand 100 b may be issued by the same issuer. Alternatively, financialinstrument 100 a may be issued by issuer 120 a and financial instrument100 b may be issued by issuer 120 b.

In certain embodiments, financial transfer 300 from financial instrument100 a to financial instrument 100 b may include a transfer of all or aportion of account 130 a to account 130 b. In certain embodiments,financial transfer 300 may be associated with a rollover of atax-deferred investment from financial instrument 100 a to financialinstrument 100 b. In certain embodiments, in addition to the transfer ofall or a portion of account 130 a to account 130 b, all or a portion ofprotected value 140 a or annual income amount 142 a may be transferredto protected value 140 b or annual income amount 142 b.

In a particular embodiment, financial instrument 100 a may includeportability guarantee 107 and issuer 120 may issue both financialinstruments 100 a and 100 b to customer 110. For example, pursuant toportability guarantee 107, issuer may issue financial instrument 100 bto customer 110 in response to an election by customer 110 to transferall or a portion of account 130 a. In this example, all or a portion ofprotected value 140 a (and/or annual income amount 142 a) may also betransferred. In certain embodiments, the percentage of protected value140 a (and/or annual income amount 142 a) transferred may be the same asthe percentage of account 130 a transferred to account 130 b. Inalternative embodiments, the percentage of protected value 140 a (and/orannual income amount 142 a) transferred may be less than the percentageof account 130 a transferred. In certain embodiments, the amount and/orthe percentage of protected value 140 a (and/or annual income amount 142a) transferred may be capped at a certain limit.

In a particular embodiment, for example, financial instrument 100 a maybe a traditional IRA and financial instrument 100 b may be a Roth IRA.As another example, financial instrument 100 a may be a group annuity oran employee retirement plan and financial instrument 100 b may be anIRA. In this example, if an account holder 112 terminates employmentwith their employer or no longer qualifies for the group annuity, thenaccount holder 112 may purchase (or otherwise initiate) financialinstrument 100 b and then transfer account 130 a to account 130 b. Allor a portion of protected value 140 a (and/or annual income amount 142a) may also be transferred to financial instrument 100 b, based on theparticular terms of financial instrument 100 a and 100 b. In theseembodiments, portability guarantee 107 may provide additional value andsecurity for customer 110 for a relatively small added cost to issuer120. For example, portability guarantee 107 may advantageously providecustomer 110 with additional flexibility with respect to employment andinvestment decisions.

In a particular embodiment, financial instrument 100 b may includecontinuation guarantee 108. For example, pursuant to continuationguarantee 108, issuer may allow customer 110 a to transfer all or aportion of account 130 a to financial instrument 100 b, and alsotransfer all or a portion of protected value 140 a (and/or annual incomeamount 142 a) to financial instrument 100 b. As one example, customer110 may elect to transfer all of account 130 a and, pursuant to theprovisions of financial instrument 100 b, account 130 b may be set asequal to the previous value of account 130 a, protected value 140 b maybe set as equal to the previous value of protected value 140 a, andannual income amount 142 b may be set as equal to the previous value ofannual income amount 142 a.

In a particular embodiment, following financial transfer 300 fromfinancial instrument 100 a to financial instrument 100 b, if thetransfer occurs prior to a first withdrawal, then all or a portion ofthe account history (from the purchase of financial instrument 100 athrough financial transfer 300) may be maintained for use in determiningprotected value 140.

For example, in a particular embodiment, if account holder 112 purchasesfinancial instrument 100 a in year one with $100,000 and financialtransfer 300 occurs in year six prior to a first withdrawal and all ofaccount 130 a is transferred to account 130 b, then upon a firstwithdrawal from account 130 b in year eight protected value 140 b may becalculated as the greatest of the value of account 130 b on the date ofthe withdrawal, the highest value of either account 130 a or account 130b on each anniversary between year one and year eight, but in no eventless than the initial deposit of $100,000 growing at a specified growthrate from year one to year eight. In certain embodiments, theanniversary date used to calculate protected value 140 b may be the sameas the anniversary date used to calculate 140 a.

FIGS. 5A and 5B illustrate an example data processing system 400 forproviding financial instrument 100 according to a particular embodiment.While in certain embodiments financial instrument 100 is entered intowithout using a computer, other embodiments may have a computerizedoption for entering into an agreement. Data processing system 400represents hardware and controlling logic for providing financialinstrument 100. In the embodiment shown, data processing system 400 mayinclude processing module 402, memory 404, and interface 406. As shown,data processing system 400 may be included as a system controlled byissuer 120. However, in other embodiments data processing system 400 maybe external to issuer 120. Additionally, although data processing system400 is shown as a single system, data processing system 400 may bedistributed across multiple platforms housed in multiple locations, someor all of which may or may not be controlled by issuer 120.

Processing module 402 may control the operation and administration ofelements within data processing system 400 by processing informationreceived from interface 406 and memory 404. Processing module 402 mayinclude any hardware and/or controlling logic elements operable tocontrol and process information. For example, processing module 402 maybe a computer, programmable logic device, a microcontroller, and/or anyother suitable device or group of devices.

Memory 404 may store, either permanently or temporarily, data and otherinformation for processing by processing module 402 and communicationusing interface 406. Memory 404 may include any one or a combination ofvolatile or nonvolatile local or remote devices suitable for storinginformation. For example, memory 404 may include random access memory(RAM), read only memory (ROM), magnetic storage devices, optical storagedevices, or any other suitable information storage device or combinationof these devices. Memory 404 may store, among other things, order data420 and account data 430.

Interface 406 communicates information to and receives information fromdevices or systems coupled to data processing system 400. For example,interface 406 may communicate with other elements controlled by issuer120, network 440, and/or elements coupled to network 440. Thus interface406 may include any hardware and/or controlling logic used tocommunicate information to and from elements coupled to data processingsystem 400.

Network 440 represents communication equipment, including hardware andany appropriate controlling logic, for interconnecting elements coupledto network 440. Thus network 440 may represent a local area network(LAN), a metropolitan area network (MAN), a wide area network (WAN),and/or any other appropriate form of network. Furthermore, elementswithin network 440 may utilize circuit-switched, packet-basedcommunication protocols and/or other communication protocols to providefor network communications. The elements within network 440 may beconnected together via a plurality of fiber-optic cables, coaxialcables, twisted-pair lines, and/or other physical media for transferringcommunications signals. The elements within network 440 may also beconnected together through wireless transmissions, including infraredtransmissions, 802.11 protocol transmissions, laser line-of-sighttransmissions, or any other wireless transmission method.

In operation, order data 420 may be transmitted from purchaser 410 todata processing system 400 through network 440. Data processing systemmay process order data 420, generate account data 430, and transmitaccount data 430 to purchaser 410 through network 440. Purchaser 410 mayrepresent one or more customers 110 or purchaser 410 may represent oneor more intermediaries acting on behalf of customers 110.

Order data 420 may include the name of account holder 112, one or moretax identifiers, the resident state of account holder 112, an initialinvestment allocation designation, and a designation of beneficiary 114and/or designated party 116. Account data 430 may include an accountnumber and a document, or reference to a document, containing theprovisions of financial instrument 100.

Upon receipt of order data 420, data processing system 400 may calculateany applicable fees associated with the provisions of financialinstrument 100. Data processing system may also identify account 130 andidentify assets and fees associated with account 130.

In certain embodiments, purchaser 410 may initiate the transmission oforder data 420 through the use of a web-based application. For example,purchaser 410 may access one or more websites and may submit certainportions of order data using those websites. Similarly, purchaser 410may utilize one or more electronic fund transfer (EFT) technologies topurchase financial instrument 100. The use of internet technologies topurchase financial instrument 100 may involve the use of one or moresecurity provisions such as digital signatures, digital certificates,passwords, and encryptions. In certain embodiments, the collection oforder data 420 may occur through the use of an interactive process. Forexample, a web-based application may present a series of questions topurchaser 410, which purchaser 410 may respond to and, in responding,submit the contents of order data 420.

FIGS. 6A and 6B show charts 500 and 550, respectively, illustratingvarious guarantees that may spring from inactivity into activity andthat may be managed at least in part by the example data processingsystem 400 of FIGS. 5A and 5B according to one embodiment. In theillustrated example, the horizontal axis of charts 500 and 550represents time in units that correspond to the age of a particularcustomer 110. The vertical axis represents actual assets of aninvestment portfolio associated with a particular financial instrument100.

As noted above, financial instrument 100 may include any combination ofinvestment contracts 102, lifetime payment guarantees 104, growth rateguarantees 106, portability guarantees 107, continuation guarantees 108,death benefit guarantees 109, and/or other provisions.

In various embodiments, data processing system 400 may be adapted tomanage the activation of various guarantees upon determining that one ormore predefined events have occurred. For example, data processingsystem 400 may be adapted to determine that one or more guaranteeprovisions have become activated upon the happening of one or moreevents predefined by financial instrument 100. In a particularembodiment, financial instrument 100 may define portability guarantee107 as an electable option that becomes active upon payment of a fee bycustomer 110 on a date occurring sometime after an inception date offinancial instrument 100. Data processing system 400 may be adapted todetermine that the requisite payment has been made and, in response,data processing system 400 may automatically generate a displayableand/or transmittable output indicating portability guarantee 107 hasbeen activated.

In an alternative embodiment, the automated management of guaranteeactivation by data processing system 400 upon the happening of one ormore predefined events may be explained in the context of a particularlifetime payment guarantee 104. A particular financial instrument 100may be established when a particular customer 110 is approximatelythirty years old to facilitate the goal of customer 110 to retire at theage of sixty-five. As shown in FIGS. 6A and 6B, data processing system400 may be adapted to determine and store a target retirement date 502corresponding to customer's 100 sixty-fifth birthday. Additionally, dataprocessing system 400 may be adapted to determine and store anactivation date 504 for lifetime payment guarantee 104 based at least inpart on the stored target retirement date 502, as explained furtherbelow.

During the period of time extending from the inception of financialinstrument 100 to (and optionally after) activation date 504, dataprocessing system 400 may periodically determine and store datarepresenting the actual assets of the customer's 110 investmentportfolio associated with financial instrument 100. For example, dataprocessing system 400 may track and record the account balance of one ormore accounts 130 created pursuant to financial instrument 100. As shownin FIGS. 6A and 6B, trend line 506 illustrates the actual assetsrecorded by data processing system 400 over time. In this example, trendline 506 shows substantial growth in actual assets from the thirtiethbirthday of customer 110 through activation date 504 occurring proximatethe sixtieth birthday of customer 110. The zoomed portion of trend line506 illustrated in FIG. 5B, however, shows substantial and continuousdecline in actual assets during the several years prior to targetretirement date 502. The actual assets available at target retirementdate 502 may, in certain cases, be insufficient to fund the retirementgoals of customer 110.

The example trend line 506 thus illustrates one of the considerablerisks of conventional retirement accounts that rely primarily on actualaccount assets to fund monetary transfers during retirement. If marketperformance contributes to sharp declines in account balances in theyears leading up to retirement, as shown by trend line 506, manynear-retirees who have invested in risky conventional retirementaccounts may be required to postpone retirement or face the prospect ofa lowered standard of living during retirement. That vulnerability wasdemonstrated in dramatic fashion during the year 2008, when even sometarget-date funds designed for participants retiring as soon as 2010lost as much as 30-40% of their value.

In particular embodiments, lifetime payment guarantee 104 may mitigaterisk exposure for customers 110 and/or may mitigate other potentialhindrances to achieving various retirement goals. For example, lifetimepayment guarantee 104 may provide that once the guarantee is activated,a retirement income base 508 is fixed at the value of a correspondingcustomer's 110 retirement assets at the time of the activation date 504.The term “income base” generally refers to a guaranteed minimum valuethat may be used to calculate the funds available to customer 110 forperiodic transfers. For example, the income base 508 may be used tocalculate annual income amount 142. Once income base 508 is set,lifetime payment guarantee 104 may provide that income base 508 will notdecline due to market performance. In certain embodiments, such exampleprovisions of lifetime payment guarantee 104 may protect customers 110from sudden market declines during the years preceding retirement and/orduring retirement. For example, lifetime payment guarantee 104 mayprovide that periodic transfers based on income base 508 will beoptionally available to customer 110 for a predefined period, even ifactual assets of account 130 are depleted to zero or are otherwiseinsufficient to cover such transfers during the predefined period. Incertain embodiments, income base 508 may be based on and/orsubstantially equal to protected value 140. In alternative embodiments,income base 508 may be protected value 140.

In various embodiments, lifetime payment guarantee 104 may provide thatincome base 508 can be stepped-up after a sustained appreciation in themarkets. For example, a step-up may occur if market performance of theinvestment portfolio increased when measured on a periodic basis (e.g.,year-over-year, monthly, etc.). FIG. 6B shows one example step-up thatmay occur proximate the sixty-first birthday of customer 110 and anotherthat may occur proximate the sixty-second birthday of customer 110. Onceincome base 508 is stepped-up, lifetime payment guarantee 104 mayprovide that income base 508 will not decline for the duration offinancial instrument 100, even if markets subsequently fall. Forexample, FIG. 6B shows an unchanged income base from the sixty-thirdbirthday of customer 110 through the sixty-fifth birthday of customer110, even though actual assets of account 130 continually declinedduring this period. In particular embodiments, lifetime paymentguarantee 104 may further provide that income base 508 may be optionallystepped-up by additional contributions to account 130. In certainembodiments, lifetime payment guarantee 104 may provide for step-ups ofincome base 508 during the time interval between activation date 504 andtarget retirement date 502 and/or after target retirement date 502 hasarrived in time. Thus, particular lifetime payment guarantees 104 mayinclude guaranteed step-up provisions and/or downside income baseprotection for customers 110 approaching and/or living in retirement.

In certain embodiments, lifetime payment guarantee 104 may provide forongoing flexibility regarding the activity status of the guarantee. Forexample, lifetime payment guarantee 104 may permit customers 110 todeactivate or otherwise cancel all or a portion of the guaranteeprovisions. In a particular embodiment, a customer 110 may triggerdeactivation of the lifetime payment guarantee 104 or a reduction of theguaranteed minimum income base, for example, by withdrawing funds fromaccount 130 in excess of a predefined particular limit.

In various embodiments, lifetime payment guarantee 104 may have one ormore provisions that may be optionally activated by customer 110. Forexample, customer 110 may exercise an option to extend the duration oflifetime payment guarantee 104 for the longest measuring life ofcustomer 110 and the spouse and/or heirs of customer 110. The option maybe exercised, for example, by payment of a fee and/or through theexercise of a previously purchased or otherwise provided credit. Thus,in certain embodiments, particular provisions of lifetime paymentguarantee 104 may be activated or deactivated upon the happening of oneor more events.

In particular embodiments, in addition to or as an alternative to payinga fee and/or exercising a credit, exercising the option to extend theduration of lifetime payment guarantee 104 for the longest measuringlife of customer 110 and the spouse and/or heirs of customer 110 may beaccompanied by a reduction in one or more amounts associated withlifetime payment guarantee 104. For example, exercising the option maybe accompanied by a reduction in income base 508 and/or annual incomeamount 142.

FIG. 7 is a flowchart 700 illustrating example steps that may beimplemented at least in part by data processing system 400 to facilitatethe management of a particular lifetime payment guarantee 104 accordingto one embodiment. In step 702, data processing system 400 may receiveinput indicating that customer 110 plans to commence retirement at theage of sixty-five. Based at least in part on this received input, dataprocessing system 400 may store a target retirement date 502 forcustomer 110 corresponding to approximately the sixty-fifth birthday ofcustomer 110. Data processing system 400 may store data representingtarget retirement date 502 in memory 404, for example, and/or at anyother suitable location.

In step 704, data processing system 400 may determine and store anactivation date 504 for lifetime payment guarantee 104. In variousembodiments, the determination of activation date 504 by data processingsystem 400 may be based at least in part on the stored target retirementdate 502. For example, data processing system 400 may subtract a timeinterval from the stored target retirement date. In certain embodiments,the subtracted time interval may be predefined by lifetime paymentguarantee 104 and/or set according to one or more inputs provided bycustomer 110. As shown in FIGS. 6A and 6B, data processing system 400may calculate activation date 502 such that it postdates an inceptiondate of financial instrument 100 and antedates target retirement date502 by approximately five years. Although in this example activationdate 504 antedates target retirement date 502 by approximately fiveyears, activation date 504 may antedate target retirement date 502 byany suitable time interval depending, for example, on the provisions oflifetime payment guarantee 104 and/or one or more inputs provided bycustomer 110. For example, in alternative embodiments activation date504 may antedate target retirement date 502 by any suitable timeinterval ranging from approximately two to twenty years (e.g., 3.2years, 7 years, 7.5 years, 10 years, 15 years, etc.). In variousembodiments, activation date 504 may occur within two years of, or mayoccur more than twenty years before, target retirement date 502. Dataprocessing system 400 may store data representing activation date 504 atmemory 404, for example, and/or at any other suitable location.

In step 706, data processing system 400 may determine and store aninitial account balance for one or more financial accounts 130. Dataprocessing system 400 may store data representing the initial balancesof one or more accounts 130 in memory 404, for example, and/or at anyother suitable location.

In step 708, data processing system 400 may determine that one or morepredefined events have occurred. For example, data processing system 400may determine that a predefined purchase price for one or moreprovisions of lifetime payment guarantee 104 has been paid. As anotherexample, data processing system 400 may determine that a certain timehas arrived, such as, for example, activation date 504. In anotherexample, data processing system 400 may determine an instance of arecurring periodic event associated with a particular financial account130.

In step 710, data processing system 400 may perform one or moreautomated processing steps in response to one or more of thedeterminations that may have been made in step 708. For example, dataprocessing system 400 may activate or deactivate one or more guaranteesof financial instrument 100 (i.e. modify the state of a guarantee storedin memory based on one or more events). In an alternative embodiment,data processing system 400 may initialize and store a value for incomebase in response to a determination in step 708 that activation date 504has arrived in time. The processing of initializing and/or initiallystoring a value for income base 508 is referred to herein as “fixing”income base 508.

In certain instances, step 710 may include responding to a periodicevent. For example, during the period of time extending from theinception of financial instrument 100 to (and optionally after)activation date 504, data processing system 400 may periodicallydetermine and store data representing the actual assets of thecustomer's 110 investment portfolio associated with financial instrument100. As another example, data processing system 400 may periodicallyupdate income base 508 based at least in part on market performance ofaccount 130 pursuant to lifetime payment guarantee 104. In certainembodiments, the periodic updates to income base 508 may occur duringthe time interval between activation date 504 and target retirement date502 and/or the periodic updates may occur after target retirement date502.

In particular embodiments, data preprocessing system 400 may updateincome base 508 in step 710 only if market performance of account 130has improved as of the previously occurring step-up date in the periodicstep-up schedule. For example, if assets of account 130 declined ascompared to the previously occurring step-up date, then the processingperformed in step 710 may result in no change to income base 508. Thus,particular lifetime payment guarantees 104 may include guaranteedstep-up provisions and/or downside income base protection for customers110 approaching and/or living in retirement

In certain embodiments, data processing system 400 may be capableautomatically generating events at least in part by storing a periodicstep-up schedule that is individualized for each customer 110. Forexample, if the actual assets of account 130 exceeds income base 508 onthe birthday of customer 110, income base 508 may be stepped-up to thesame, or approximately the same, value as the actual assets as of thebirthday of customer 110. As shown in FIG. 6 b, income base 508 isstepped-up proximate the sixty-first birthday of customer 110 andsubsequently stepped-up again proximate the sixty-second birthday ofcustomer 110. Although this example sets the periodic step-up scheduleaccording to the birthday of customer 110, any annual, monthly, and/orother periodic schedule specific to customer 110 may be used. By usingperiodic step-up schedules that are customer-specific, particularstep-ups performed by data processing system 400 pursuant to lifetimepayment guarantee 104 may be distributed throughout time, which may becontrasted with using concurrent step-up dates for all customers 110.

In various embodiments, lifetime payment guarantee 104 may provide thatincome base 508 may be optionally stepped-up by additional contributionsto account 130. The step-up may be immediate upon a determination bydata processing system 400 that payment for this provision has been madeand/or received. Alternatively, the step-up may occur in step 710 as anupdate that may be based on a periodic schedule and/or a lapse of apredefined amount of time.

In certain embodiments, data processing system 400 may periodicallyupdate income base 508 in response to the execution of one or morewithdrawal requests. For example, data processing system 400 maydetermine that the amount of a withdrawal request is within apredetermined acceptable limit. In response, data processing system 400may reduce income base 508 by an amount corresponding to the amount ofthe withdrawal request. In particular embodiments, data processingsystem 400 may further reduce the income base 508 an additional amountcorresponding to one or more fees associated with the withdrawalrequest.

A monetary transfer is another event that data processing system 400 mayprocess in step 710. For example, data processing system 400 maydetermine the value of the monetary transfer based at least in part on aparticular withdrawal request. Additionally or alternatively, dataprocessing system 400 may determine the value of the monetary transferbased at least in part on the current value of income base 508 asdetermined on a periodic basis. In certain embodiments, the value of thetransfer may be determined as a predetermined and/or a maximumpercentage of income base 508. In particular embodiments, the valuedetermined in step 710 may be annual income amount 142. In certainembodiments, data processing system 400 may automatically delay themonetary transfer determinations until after one or more predefinedevents have occurred. For example, data processing system 400 may delaydeterminations of monetary transfers until after the occurrence oftarget retirement date 502 and/or activation date 504. In certainembodiments, data processing system 400 may store data representing thevalue determined in step 714 at memory 404, for example, and/or at anyother suitable location.

The processing of a monetary transfer in step 710 may further includeoutputting the value of the monetary transfer. For example, dataprocessing system 400 may generate data representing the determinedvalue of monetary transfer, transmit data representing the determinevalue of the monetary transfer, and/or perform an actual wire transferof funds corresponding to the determined value of the monetary transfer.In particular embodiments, data processing system 400 may be adapted totransfer data in a displayable format, such that the value of themonetary transfer determined in step 710 is displayable on one or moredisplays (e.g., a computer screen, kiosk, monitor, projected image,etc.).

FIG. 8 illustrates an embodiment of a client 500 that may be used tosecurely access the data processing system of FIGS. 5A and 5B accordingto one embodiment. In this example, client 500 may be a specializedcomputer capable of establishing a secure connection with othercomputers. In addition, client 500 may comprise hardware and/ornon-transitory software capable of encrypting outgoing data anddecrypting incoming data; however, any suitable client may be used. Incertain embodiments, client 500 may generally be adapted to execute anyof the well-known OS2, UNIX, Mac-OS, Linux, and Windows OperatingSystems or other operating systems. In the illustrated embodiment client500 includes a processor 502, a random access memory (RAM) 504, a readonly memory (ROM) 506, a mouse 508, a keyboard 510 and input/outputdevices such as a printer 514, disk drives 512, a display 516 and acommunications link 518. In other embodiments, client 500 may includemore, less, or other component parts. For example, client 500 mayinclude one or more security protocols and/or one or more securityhardware, software, and/or firmware features adapted to provide adequatesecurity for the administration of financial instrument 100.

Embodiments of the present invention may include non-transitory programsthat may be stored in and/or loaded into the RAM 504, the ROM 506 or thedisk drives 512 and may be executed by the processor 502. Thecommunications link 518 may be connected to a computer network or avariety of other communicative platforms including, but not limited to,a public or private data network; a local area network (LAN); ametropolitan area network (MAN); a wide area network (WAN); a wirelineor wireless network; a local, regional, or global communication network(e.g., the Internet); an optical network; a satellite network; anenterprise intranet; other suitable communication links; or anycombination of the preceding. Disk drives 512 may include a variety oftypes of storage media such as, for example, floppy disk drives, harddisk drives, CD ROM drives, DVD ROM drives, magnetic tape drives orother suitable storage media.

Although FIG. 8 provides one embodiment of a client 500 computer thatmay be used with the invention, the invention may additionally utilizecomputers other than clients 500 as well as clients 500 withoutconventional operating systems. Additionally, embodiments of theinvention may also employ multiple clients 500 or other computersnetworked together in a computer network. Most commonly, multipleclients 500 or other computers may be networked through the Internetand/or in a client server network. Embodiments of the invention may alsobe used with a combination of separate computer networks each linkedtogether by a private or a public network.

Several embodiments of the invention may include non-transitory logicrecorded on computer-readable media, including a tangible,non-transitory computer-readable medium. In the embodiment of FIG. 8,the logic comprises computer software executable by data processingsystem 400 and/or by client 500. The medium may include the RAM 504, theROM 506 or the disk drives 512. In other embodiments, the logic may becontained within hardware configuration or a combination of software andhardware configurations. The non-transitory logic may also be embeddedwithin any other suitable computer-readable medium without departingfrom the scope of the invention.

Although particular embodiments may allow for the election of variousoptions before, after, and/or concurrent with the time of a firstwithdrawal, certain embodiments may allow the election of variousoptions independent of the time of a first withdrawal.

The components of the systems and apparatuses disclosed herein may beintegrated or separated. Moreover, the operations of the systems andapparatuses may be performed by more, fewer, or other components. Themethods may include more, fewer, or other steps. Additionally, steps maybe performed in any suitable order. Particular operations of the systemsand apparatuses disclosed herein may be performed using any suitablenon-transitory logic embodied in computer-readable media, includingtangible, non-transitory computer-readable media. As used in thisdocument, “each” refers to each member of a set or each member of asubset of a set.

Although the present disclosure has been described above in connectionwith several embodiments, a myriad of changes, substitutions,variations, alterations, transformations, and modifications may besuggested to one skilled in the art, and it is intended that the presentinvention encompass such changes, substitutions, variations,alterations, transformations, and modifications as fall within thespirit and scope of the appended claims.

To aid the Patent Office, and any readers of any patent issued on thisapplication in interpreting the claims appended hereto, applicants wishto note that they do not intend any of the appended claims to invokeparagraph 6 of 35 U.S.C. §112 as it exists on the date of filing hereofunless the words “means for” or “step for” are explicitly used in theparticular claim.

1. A non-transitory computer-readable media comprising logic operable,when executed by a data processing system, to: determine and store anaccount balance for a financial account, the financial accountcomprising an investment portfolio and a springing guarantee of anincome base for a retirement income, the retirement income comprisingperiodic monetary transfers to be commenced at a target retirement date,each periodic monetary transfer having a respective value based on theincome base, the springing guarantee of the income base to be activatedon an activation date, wherein the account balance is stored in memoryof a computer system; periodically update the stored account balancebased at least in part on market performance of the investmentportfolio; determine and store the activation date, the determination ofthe activation date based at least in part on the target retirementdate, the activation date antedating the target retirement date by adefined period of time, the activation date postdating an inception dateof the financial account, wherein the activation date is stored inmemory of the data processing system; determine and store the incomebase, the income base being a value fixed at a time proximate theactivation date, the determination of the income base based at least inpart on the stored account balance at the time proximate the activationdate, wherein the income base is stored in memory of the data processingsystem, and wherein the springing guarantee of the income base providesthat the income base will not decrease over time so long as discretionalwithdrawals from the financial account do not exceed a defined limit;and output the respective value for each one of the periodic monetarytransfers, the respective value of each one of the periodic monetarytransfers being based on the value of the stored income base at a timeproximate the one of the periodic monetary transfers.
 2. Thenon-transitory computer-readable media of claim 1, wherein the logic isfurther operable, when executed by the data processing system, toautomatically wire transfer the respective value for each periodicmonetary transfer.
 3. The non-transitory computer-readable media ofclaim 1, wherein the logic is further operable, when executed by thedata processing system, to periodically update the stored income base,the update of the stored income base being based at least in part onmarket appreciation of the investment portfolio, the market appreciationof the investment portfolio occurring between the activation date andthe target retirement date.
 4. The non-transitory computer-readablemedia of claim 1, wherein the logic is further operable, when executedby the data processing system, to periodically update the stored incomebase, the update of the stored income base being based at least in parton market appreciation of the investment portfolio, the marketappreciation of the investment portfolio occurring after the targetretirement date.
 5. The non-transitory computer-readable media of claim1, wherein the springing guarantee of the income base provides that theincome base will vary, if at all, independently of market depreciationof the investment portfolio.
 6. The non-transitory computer-readablemedia of claim 1, wherein the logic is further operable, when executedby the data processing system, to automatically update the storedactivation date, the update of the stored activation date being inresponse to an event affecting the target retirement date.
 7. Thenon-transitory computer-readable media of claim 6, wherein the event isa withdrawal from the financial account.
 8. The non-transitorycomputer-readable media of claim 1, wherein the investment portfoliocomprises one or more investments selected from a plurality of optionalinvestments diversified across a mix of asset classes.
 9. Thenon-transitory computer-readable media of claim 1, wherein the logic isfurther operable, when executed by the data processing system, to changethe composition of the investment portfolio based on one or morereceived instructions.
 10. The non-transitory computer-readable media ofclaim 1, wherein the respective value of each one of the periodicmonetary transfers is a defined percentage of the value of the storedincome base at a time proximate the one of the periodic monetarytransfers, the defined percentage being within the range of 1 and 20percent.
 11. The non-transitory computer-readable media of claim 1,wherein the defined period of time is greater than or equal to twoyears.
 12. The non-transitory computer-readable media of claim 1,wherein the defined period of time is substantially equal to a periodselected from the group comprising one year, two years, five years, tenyears, and fifteen years.
 13. A computer-implemented method forfacilitating the management of a financial instrument, the methodcomprising: using a data processing system, determining an accountbalance for a financial account, the financial account comprising aninvestment portfolio and a springing guarantee of an income base for aretirement income, the retirement income comprising periodic monetarytransfers to be commenced at a target retirement date, each periodicmonetary transfer having a respective value based on the income base,the springing guarantee of the income base to be activated on anactivation date; storing the account balance in memory of the dataprocessing system; periodically updating the stored account balancebased at least in part on market performance of the investmentportfolio; using the data processing system, determining the activationdate, the determination of the activation date based at least in part onthe target retirement date, the activation date antedating the targetretirement date by a defined period of time, the activation datepostdating an inception date of the financial account, wherein theactivation date is stored in memory of the data processing system; usingthe data processing system, determining the income base, the income basebeing a value fixed at a time proximate the activation date, thedetermination of the income base based at least in part on the storedaccount balance at the time proximate the activation date, wherein theincome base is stored in memory of the data processing system, andwherein the springing guarantee of the income base provides that theincome base will not decrease over time so long as discretionalwithdrawals from the financial account do not exceed a defined limit;storing the income base in memory of the data processing system; andoutputting the respective value for each one of the periodic monetarytransfers, the respective value of each one of the periodic monetarytransfers being based on the value of the stored income base at a timeproximate the one of the periodic monetary transfers.
 14. The method ofclaim 13, further comprising wire transferring the respective value foreach periodic monetary transfer.
 15. The method of claim 13, furthercomprising periodically updating the stored income base, the update ofthe stored income base being based at least in part on marketappreciation of the investment portfolio, the market appreciation of theinvestment portfolio occurring between the activation date and thetarget retirement date.
 16. The method of claim 13, further comprisingperiodically updating the stored income base, the update of the storedincome base being based at least in part on market appreciation of theinvestment portfolio, the market appreciation of the investmentportfolio occurring after the target retirement date.
 17. The method ofclaim 13, wherein the springing guarantee of the income base providesthat the income base will vary, if at all, independently of marketdepreciation of the investment portfolio.
 18. The method of claim 13,further comprising automatically updating the stored activation date,the update of the stored activation date being in response to an eventaffecting the target retirement date.
 19. The method of claim 18 whereinthe event is a withdrawal from the financial account.
 20. The method ofclaim 13, wherein the investment portfolio comprises one or moreinvestments selected from a plurality of optional investmentsdiversified across a mix of asset classes.
 21. The method of claim 13,further comprising, using the data processing system, changing thecomposition of the investment portfolio based on one or more receivedinstructions.
 22. The method of claim 13, wherein the respective valueof each one of the periodic monetary transfers is a defined percentageof the value of the stored income base at a time proximate the one ofthe periodic monetary transfers, the defined percentage being within therange of 1 and 20 percent.
 23. The method of claim 13, wherein thedefined period of time is greater than or equal to two years.
 24. Themethod of claim 13, wherein the defined period of time is equal orsubstantially equal to a period selected from the group comprising oneyear, two years, five years, ten years, and fifteen years.
 25. Anon-transitory computer-readable media comprising logic operable, whenexecuted by a data processing system, to: determine and store an accountbalance for a financial account, the financial account comprising one ormore investments and a springing guarantee of an income base for aretirement income, the retirement income comprising periodic monetarytransfers to be commenced at a target retirement date, each periodicmonetary transfer having a respective value based on the income base,the springing guarantee of the income base to be activated on anactivation date, wherein the account balance is stored in memory of acomputer system; periodically update the stored account balance based atleast in part on market performance of the one or more investments;determine and store the activation date, the determination of theactivation date based at least in part on the target retirement date,the activation date antedating the target retirement date by a definedperiod of time, the activation date postdating an inception date of thefinancial account, wherein the activation date is stored in memory ofthe data processing system; determine and store the income base, theincome base being a value fixed at a time proximate the activation date,the determination of the income base based at least in part on thestored account balance at the time proximate the activation date,wherein the income base is stored in memory of the data processingsystem, wherein the springing guarantee of the income base provides thatthe income base will not decrease due to negative market performance ofthe one or more investments, and wherein the springing guarantee of theincome base provides that the income base will increase due to positivemarket performance of the one or more investments; and output therespective value for each one of the periodic monetary transfers, therespective value of each one of the periodic monetary transfers beingbased on the value of the stored income base at a time proximate the oneof the periodic monetary transfers.
 26. The non-transitorycomputer-readable media of claim 25, wherein the logic is furtheroperable, when executed by the data processing system, to automaticallywire transfer the respective value for each periodic monetary transfer.27. The non-transitory computer-readable media of claim 25, wherein thelogic is further operable, when executed by the data processing system,to periodically update the stored income base, the update of the storedincome base being based at least in part on positive market performanceof the one or more investments, the positive market performance of theone or more investments occurring between the activation date and thetarget retirement date.
 28. The non-transitory computer-readable mediaof claim 25, wherein the logic is further operable, when executed by thedata processing system, to periodically update the stored income base,the update of the stored income base being based at least in part onpositive market performance of the one or more investments, the positivemarket performance of the one or more investments occurring after thetarget retirement date.
 29. The non-transitory computer-readable mediaof claim 25, wherein the springing guarantee of the income base providesthat the income base will vary, if at all, independently of negativemarket performance of the one or more investments.
 30. Thenon-transitory computer-readable media of claim 25, wherein the logic isfurther operable, when executed by the data processing system, toautomatically update the stored activation date, the update of thestored activation date being in response to an event affecting thetarget retirement date.
 31. The non-transitory computer-readable mediaof claim 30, wherein the event is a withdrawal from the financialaccount.
 32. The non-transitory computer-readable media of claim 25,wherein the one or more investments are selected from a plurality ofoptional investments diversified across a mix of asset classes.
 33. Thenon-transitory computer-readable media of claim 25, wherein the logic isfurther operable, when executed by the data processing system, to changethe composition of the one or more investments based on one or morereceived instructions.
 34. The non-transitory computer-readable media ofclaim 25, wherein the respective value of each one of the periodicmonetary transfers is a defined percentage of the value of the storedincome base at a time proximate the one of the periodic monetarytransfers, the defined percentage being within the range of 1 and 20percent.
 35. The non-transitory computer-readable media of claim 25,wherein the defined period of time is greater than or equal to twoyears.
 36. The non-transitory computer-readable media of claim 25,wherein the defined period of time is substantially equal to a periodselected from the group comprising one year, two years, five years, tenyears, and fifteen years.
 37. A computer-implemented method forfacilitating the management of a financial instrument, the methodcomprising: using a data processing system, determining an accountbalance for a financial account, the financial account comprising one ormore investments and a springing guarantee of an income base for aretirement income, the retirement income comprising periodic monetarytransfers to be commenced at a target retirement date, each periodicmonetary transfer having a respective value based on the income base,the springing guarantee of the income base to be activated on anactivation date; storing the account balance in memory of the dataprocessing system; periodically updating the stored account balancebased at least in part on market performance of the one or moreinvestments; using the data processing system, determining theactivation date, the determination of the activation date based at leastin part on the target retirement date, the activation date antedatingthe target retirement date by a defined period of time, the activationdate postdating an inception date of the financial account, wherein theactivation date is stored in memory of the data processing system; usingthe data processing system, determining the income base, the income basebeing a value fixed at a time proximate the activation date, thedetermination of the income base based at least in part on the storedaccount balance at the time proximate the activation date, wherein theincome base is stored in memory of the data processing system, whereinthe springing guarantee of the income base provides that the income basewill not decrease due to negative market performance of the one or moreinvestments, and wherein the springing guarantee of the income baseprovides that the income base will increase due to positive marketperformance of the one or more investments; and storing the income basein memory of the data processing system; and outputting the respectivevalue for each one of the periodic monetary transfers, the respectivevalue of each one of the periodic monetary transfers being based on thevalue of the stored income base at a time proximate the one of theperiodic monetary transfers.
 38. The method of claim 37, furthercomprising wire transferring the respective value for each periodicmonetary transfer.
 39. The method of claim 37, further comprisingperiodically updating the stored income base, the update of the storedincome base being based at least in part on positive market performanceof the one or more investments, the positive market performance of theone or more investments occurring between the activation date and thetarget retirement date.
 40. The method of claim 37, further comprisingperiodically updating the stored income base, the update of the storedincome base being based at least in part on positive market performanceof the one or more investments, the positive market performance of theone or more investments occurring after the target retirement date. 41.The method of claim 37, wherein the springing guarantee of the incomebase provides that the income base will vary, if at all, independentlyof negative market performance of the one or more investments.
 42. Themethod of claim 37, further comprising automatically updating the storedactivation date, the update of the stored activation date being inresponse to an event affecting the target retirement date.
 43. Themethod of claim 42 wherein the event is a withdrawal from the financialaccount.
 44. The method of claim 37, wherein the one or more investmentsare selected from a plurality of optional investments diversified acrossa mix of asset classes.
 45. The method of claim 37, further comprising,using the data processing system, changing the composition of the one ormore investments based on one or more received instructions.
 46. Themethod of claim 37, wherein the respective value of each one of theperiodic monetary transfers is a defined percentage of the value of thestored income base at a time proximate the one of the periodic monetarytransfers, the defined percentage being within the range of 1 and 20percent.
 47. The method of claim 37, wherein the defined period of timeis greater than or equal to two years.
 48. The method of claim 37,wherein the defined period of time is equal or substantially equal to aperiod selected from the group comprising one year, two years, fiveyears, ten years, and fifteen years.